What Is a New Construction Loan?
A New Construction Loan is a short-term, asset-based loan that provides funding to real estate investors or builders to finance ground-up construction of residential or commercial properties.
Unlike traditional loans, these are based on the project’s total cost and future value, not personal income.
This loan is used to:
Purchase land (optional)
Fund the construction of a new property
Exit via sale or refinance upon project completion
Approved building plans
Contractor agreement or GC resume
Detailed construction budget
Permits (or plan to secure)
Exit strategy (sell or refinance)
Experience (preferred but not required)
Requirements:
Ideal Projects:
New single-family or multi-family builds
Infill lot developments
Spec homes
Townhomes or duplexes
Build-to-rent properties
Sell the completed property for a profit
Refinance into a 30-year rental loan (DSCR or conventional)
Hold as part of a long-term portfolio
Exit Strategies:
Build brand-new investment properties with less capital upfront
Flexible underwriting with fast approvals
Rehab draws keep you funded throughout construction
Helps builders and investors scale projects faster